Description

The last financial crisis revealed that financial imperfections and institutions play a more important role than th e literature has assigne d them for a long time, and it is possible to ascertain strongly that in the coming years m acroeconomic research will be dominated by the study of the relationships between financia l frictions, financial systems and aggregate fluctuations. This paper conducts a selectiv e review of existing literatu re on monetary policy and its interaction with financial variables. It then examines frontier research presented at the XIII Annual Conference of the Central Bank of Chile , which gathers new theoretical results and empirical evidence applicable both in deve loped countries and in the Chilean economy.